Businessmodel of Instacart

Customer Segments

Instacart primarily serves consumers who do not have the time or mobility to do their own grocery shopping – including busy professionals, the elderly, the disabled and people without transportation – and customers that require delivery of groceries from several stores at short notice.

The service is only available in the US, across cities in 19 of the country’s 52 states. Instacart can also include its personal shoppers as customers, who receive commissions for orders they deliver as part of the sharing economy-based platform. Personal shoppers require only a smartphone and means of delivery in order to complete orders.

The Company’s third customer segment comprises local stores that can use the Instacart platform to extend their reach within the local community.

Value Propositions

Instacart’s greatest value to consumers is the ease with which its platform can be used, the efficiency of its delivery service and its flexibility. The Company’s platform can be accessed on any device and at any time, allowing consumers to place grocery orders on the go.

Deliveries are made quickly when necessary or can be scheduled to arrive at a convenient time, removing the stress and time associated with traditional grocery shopping. The platform also enables consumers to buy products from several different retailers in a single order, streamlining the shopping process considerably.

For its team of personal shoppers it allows a flexible working schedule and the opportunity to receive tips.

The Company also expands the reach of local stores, increasing its audience and ultimately its sales revenue.

Channels

Instacart’s grocery delivery platform can be accessed via the Company’s mobile and desktop websites at www.instacart.com or through its mobile apps for iOS and Android.

Customer Relationships

The Instacart platform is a self-service offering that relies on the sharing economy system. Registration can be completed via the Company’s website or through its iOS and Android apps. Once registered, users are free to browse products from retailers in their area, place orders and schedule deliveries without the need to interact with members of the Instacart team.

Instacart does, however, provide its customers with support, providing guides and FAQs on its website. Customers are also able to contact sales and support representatives directly via email, phone and online contact forms.

In addition, the Company keeps its customers updated with developments through its blog and its Facebook, Twitter, Pinterest and Instagram accounts.

Key Activities

Instacart develops, manages and maintains an online grocery delivery platform which operates on a sharing-economy basis.

The Company’s platform enables users to place orders from one or several local stores and receive delivery within one or two hours or at scheduled time, with deliveries completed by a team of personal shoppers.

In order to complete this service Instacart manages a network of retail partners, comprising large chains and independent stores, ensuring a varied inventory of groceries and other products, and manages its local teams of personal shoppers.

Key Partners

Instacart’s key partners are its network of retailers, comprising large retail chains and independent stores. The Company has agreed a number of tie-ups with US stores, enabling them to place orders and arrange pick-ups from a number of outlets.

In return for providing Instacart with access to their product inventory, partners have reportedly recorded increased online sales and greater reach within their target markets.

Instacart includes US grocery chains Whole Foods, Fairway Market, H Mart and Costco among its retail partners, as well as retailers that provide other specialist products such as wine merchant Total Wine, beverage retailer Binny’s and pet shop Petco. Instacart has also partnered with recipe platform Yummly to provide delivery of recipe ingredients.

Key Resources

Instacart’s key resources are its software platform, its IT infrastructure, its team of personal shoppers and its retail partners.

There are no patent applications filed with the US Patent and Trademark Office in the names of Instacart or Maplebear.

Cost Structure

Instacart’s principal costs relate to the development and maintenance of its grocery delivery platforms, its retention of full-time sales, support and development personnel, operation of its IT infrastructure and data network, and payment of commissions to personal shoppers.

Instacart also incurs costs related to its rental of office space and utilities.

Revenue Streams

Instacart generates revenue through various fees levied on its customers. This primarily includes a surcharge placed on some items available through the Company’s network of retail partners and delivery charges. Delivery charges are around $5.99 for two hour or scheduled delivery or more for one hour delivery, limited to orders over $35. Customers are charged higher delivery fees during busy periods and higher fees for orders under $35. Instacart customers may also pay $149 for an annual subscription to the Instacart service, receiving free two hour deliveries on all orders over $35.

Recent reports suggest that Instacart generates around $6.96 per order in Atlanta and $4.29 per order in Chicago, its largest urban market, while it loses money on orders in New York City and San Francisco’c Bay Area.

The Company, however, is reported to be profitable. In addition to these methods, Instacart also generates a small amount of revenue through the charging of credit card transaction fees.